The Network Challenge (Chapter 21): Networks in Finance

Kobo ebook | May 19, 2009

byFranklin Allen, Ana Babus

not yet rated|write a review

Modern financial systems exhibit a high degree of interdependence, with connections between financial institutions stemming from both the asset and the liability sides of their balance sheets. Networks--broadly understood as a collection of nodes and links between nodes--can be a useful representation of financial systems. By modeling economic interactions, network analysis can better explain certain economic phenomena. In this chapter, Allen and Babus argue that the use of network theories can enrich our understanding of financial systems. They explore several critical issues. First, they address the issue of systemic risk, by studying two questions: how resilient financial networks are to contagion, and how financial institutions form connections when exposed to the risk of contagion. Second, they consider how network theory can be used to explain freezes in the interbank market. Third, they examine how social networks can improve investment decisions and corporate governance, based on recent empirical results. Fourth, they examine the role of networks in distributing primary issues of securities. Finally, they consider the role of networks as a form of mutual monitoring, as in microfinance.

Pricing and Purchase Info

$3.92

Available for download
Not available in stores

From the Publisher

Modern financial systems exhibit a high degree of interdependence, with connections between financial institutions stemming from both the asset and the liability sides of their balance sheets. Networks--broadly understood as a collection of nodes and links between nodes--can be a useful representation of financial systems. By modeling ...

Format:Kobo ebookPublished:May 19, 2009Publisher:Pearson EducationLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0137015518

ISBN - 13:9780137015511

Customer Reviews of The Network Challenge (Chapter 21): Networks in Finance

Reviews